Proposed House Bill Asks Companies to Disclose Board Members’ Cybersecurity Expertise
A bipartisan group in the House of Representatives has proposed a bill requiring public companies to say whether their boards include members with knowledge of cybersecurity. Similar to a Senate bill debated this year, the Cybersecurity Disclosure Act directs the Securities and Exchange Commission (“SEC”) to create provisions requiring public companies to disclose in annual reports or proxy statements the details of their board members’ “expertise or experience” in cybersecurity. If a board member has no cybersecurity background, then a company would have to explain how it considers cybersecurity when selecting new directors. The SEC and the National Institute of. Read More.
House Bill Includes Insider Trading Plan Study
News of Rep. Chris Collins’ (R-N.Y.) recent indictment for insider trading has brought attention to a little-known provision in the JOBS and Investor Confidence Act of 2018. Passing through the House of Representatives last month, the bill dubbed “JOBS Act 3.0” features a measure requiring the Securities and Exchange Commission (“SEC”) to study insider trading plans administered by Rule 10b5-1 of the Securities Exchange Act. Such plans let company insiders trade stock on a fixed schedule and avoid liability from insider trading. The study includes examining the new restrictions to Rule 10b5-1, such as when an issuer can implement a 10b5-1 plan. Currently, Rule 10b5-1 offers an organized approach. Read More.
SEC Lightens Disclosure Requirements for Public Companies
As part of its Disclosure Simplification initiative, the Securities and Exchange Commission (“SEC”) has published a rule to reduce a public company’s disclosure requirements. Issued as Release No. 33-10532, Disclosure Update and Simplification, the final amendments will help public companies with their regulatory reporting without denying investors of information beneficial to their investment-making decisions. The changes aim to implement the provisions under Section 72002(2) of the Fixing America’s Surface Transportation Act and mostly follow the proposed versions published under Release No. 33-10110, Disclosure Update and Simplification. The changes will be effective 30 days after their publication in the Federal Register. Meanwhile, the. Read More.
SEC Proposes Simplification for Guaranteed Debt Offering Disclosures
A proposal by the Securities and Exchange Commission (“SEC”) would simplify the disclosure requirements for guaranteed debt offerings and promote increased registration of offerings. Issued as Release No. 33-10526, Financial Disclosures About Guarantors and Issuers of Guaranteed Securities and Affiliates Whose Securities Collateralize a Registrant’s Securities, the proposed changes are intended to reduce companies’ regulatory compliance expenses when offering debt to investors and help issuers organize deals supported by collateral. SEC chairman Jay Clayton also noted that changes will make disclosures easier to follow and encourage debt offerings to be achieved on an SEC-registered basis. The proposal amends Rule 3-10 of. Read More.
SEC Fiscal Year 2019 Budget Approved
Last week, the House of Representatives approved the Securities and Exchange Commission’s (“SEC”) $1.7 billion budget for the agency’s fiscal year 2019. Next year’s spending budget is a modest improvement from the SEC’s 2018 version ($1.6 billion) and is part of a bigger bill that funds other agencies like the Department of Treasury, Internal Revenue Service, and Commodity Futures Trading Commission. House Republican leaders tied the SEC’s budget to several deregulatory provisions. For instance, the SEC cannot force public companies to reveal their political spending or enforce a law that reformats the proxy cards in shareholder votes via a universal. Read More.
Nearly 1,000 Companies to Receive Smaller Reporting Company Status
With unanimous approval, the Securities and Exchange Commission (“SEC”) voted last month to issue a final rule that will give 966 companies smaller reporting company status. The rule, Release No. 33-10513, Amendments to Smaller Reporting Company Definition, raises the public float threshold (i.e., the value of a company’s publicly traded stock) for a smaller reporting company from $75 million to $250 million. Additionally, companies with no public float or have a public float under $700 million can qualify as a smaller reporting company if annual revenues were less than $100 million in their most recently concluded fiscal year. The SEC. Read More.